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NBC's new video content for iPad weakens Hulu auction

While both TV networks Fox and ABC are taking measures to walled up their content, Comcast's NBC Universal has taken a different turn, last week making more of its content available in full to iPad users. And the move, said BTIG Research analyst Richard Greenfield, makes the sale of Hulu more difficult – better deal for viewers.

NBC Universal late last week released an enhanced version of its Apple iPad app that previously had allowed users to view only trailers and clips and some information about shows. The new app not only opens more shows up to full viewing on the iPad, it also fixes a number of bugs and upgrades the app's performance on the tablet.

"We are thrilled to offer our fans full episodes via our NBC.com app," said Vivi Zigler, president of NBC Universal Digital Entertainment. "Now the app truly reflects the deep fan experience that we have created online at NBC.com. And our fans are going to love the latest update to the NBC Live app which now offers them more content, better access and a unique social television experience."

However the move creates problems for Hulu, Greenfield said. "Just as Fox is pushing new content behind an authentication wall with ABC thinking about following Fox's lead, NBC does the exact opposite by providing free access to NBC content on portable devices," Greenfield stated. "Imagine how the potential buyers of Hulu feel looking at NBC's move, which appears to be a direct attack on the Hulu-Plus subscriber base." After all, why would iPad owners pay US$8 a month for Hulu Plus when they can get content from two of the three networks backing the site for free?

This scenario reflects the dilemma of old-time broadcasters. At present there seems to be a real barrier between the new class and the old guard. While broadcasters are keen to explore new platforms and potentially reach new audiences, they are, understandably, unwilling to relinquish control over their programming and subsequent advertising that appears against it.

It's a shame that this argument is taking place so late on. It smacks of when Video On Demand (VOD) was first introduced and some broadcasters were so blinkered on linear TV they could not reach agreements with the cable operators. At that stage, those broadcasters were left behind, as products like the BBC iPlayer, 4oD and ITV Player led the way to making non-linear viewing a mass-market phenomenon and valuable revenue source.

The NBC content is pretty good, with the five most recent episodes of primetime scripted shows available, as well as all the episodes of America's Got Talent and the eight most recent shows from Late Night with Jimmy Fallon.

ABC, since last April 2010, also makes its shows available for free on the iPad on what has proven to be one of the slickest iPad apps available.

The question, of course, is why NBC Universal, whose parent company, Comcast, owns one third of Hulu, would want to create waves? Especially with what are reported to be multiple offers on the table in the US$1.5 billion to $2 billion range and possibly more from Google. And, how does making content available for free on the iPad play into Comcast's TV Everywhere initiative?

The short answer, said Greenfield, is that the new app does not play into TVE at all. His explanation? It's all about NBC desperately trying to raise ratings for its shows.